Beef Industry Outlook: Herd Rebuilding Still Unclear Amid Record Prices
U.S. cow inventory is at a 60-year low, but beef producers remain cautious. Strong prices and tight supply dominate, yet the path to herd expansion remains uncertain.
The 2025 State of the Beef Industry Report paints a complex picture for cattle producers. While cow-calf operations are enjoying some of the highest prices on record, the overall U.S. beef cow inventory has dropped to its lowest point since 1962-confirming the industry is at the bottom of the current cattle cycle.
"For cow-calf producers right now, things are as good as they've probably ever been," says Troy Rowan, assistant professor at the University of Tennessee. But alongside optimism, producers remain vigilant. Economic pressures, particularly input inflation, are pushing producers to focus on risk management and cost control.
Key Metrics From the 2025 Report
| Beef Cow Inventory | Lowest since 1962 |
| Producer Sentiment | Cautious optimism despite record cattle prices |
| Primary Concerns | High input costs, economic uncertainty, and tight feeder supplies |
| Expansion Status | No widespread herd rebuilding yet |
Despite strong margins, analysts like Dave Weaber, senior animal protein analyst at Terrain, say the industry is not in expansion mode. Most producers are not retaining heifers, citing ongoing economic volatility.
Even with historically high cattle prices, producers are hesitant. Many are instead investing in technology, improving crossbreeding programs, and diversifying income streams rather than rebuilding herds.
"The national herd size puts the industry at a tipping point," Rowan notes. "We're profitable, but nobody expects this to last forever."
The Beef-on-Dairy Shift: Filling the Supply Gap
As herd numbers remain low, companies like Cargill say the supply gap is increasingly being filled by beef-on-dairy calves. This practice is emerging as a structural shift in the industry, not just a stopgap solution.
| Beef-on-Dairy Calves | Helping replace traditional beef herd shortfalls |
| Quality Improvements | Better red meat yield and acceptance in branded beef programs |
| Feedlot Integration | Widely accepted by feeders and packers, especially in the Plains states, senior director at Cargill. It produces that better meet market demand. |
"Beef-on-dairy is more desirable because it overcomes many Holstein issues," says Nick Hardcastle, senior director at Cargill. It produces higher-yielding cattle that better meet market demand.
Industry leaders emphasize the need for financial discipline, flexibility, and data-driven strategies. According to Weaber, those who manage costs and adopt smart business practices will ride out volatility and outperform peers over the long term.
"Being a low-cost, high-productivity producer means you get to make money seven, eight or nine years of the cycle," Weaber says.
Producers are encouraged to work on the business, not just in the business, by implementing strategic planning, market alignment, and technology adoption.
The State of the Beef Industry Report, based on feedback from nearly 500 beef producers, reveals a sector in transition. While herd rebuilding may take time, the industry is evolviwith beef-on-dairy, market diversification, and modern management tools playing a growing role.
In this shifting landscape, those who embrace innovation and financial rigor will be best positioned to thrive.